The Polish tax system is characterised by high social security contributions for both employers and
employees. As a result, Poland has one of the highest tax wedges in the OECD, despite relatively low
personal income tax rates. This, combined with a relatively high minimum wage and generous
early-retirement and disability benefit programmes, contributes to low employment rates, in particular
among low-skilled workers. The system also relies heavily on consumption taxes, whereas relatively little
revenue is collected from such bases as environment externalities, inheritances and, in particular, property.
One of the key implications of the tax structure is that the system as a whole is one of the least
redistributive among OECD countries. This paper reviews the main features of the tax system and explores
options to improve its efficiency, including possibilities to broaden existing tax bases as well as to shift the
tax burden from labour towards less mobile and distorting sources such as property.
